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Notable quotable(s)

Food vs. fuel edition

Posted by Tom Philpott at 1:15 PM on 25 Apr 2008

Read more about: quotables | food | biofuels | agriculture

"To say that biofuels are the culprit [for food-price hikes] clearly underestimates the demand [for food] and really shows a gross misunderstanding of the world food situation."

-- Bill Doyle, CEO Potash Corp, the world's largest fertilizer company, which has seen its share price rise 600 percent in the past two years, quoted April 24

"While global [grain] output in 2007/08 would be the highest ever, mainly because of a record U.S. maize (corn) crop, this would not match consumption, resulting in a further downturn in global ending stocks in 2007/08. By far the biggest increase in consumption would be in the biofuels sector, with the amount of grain (mainly maize) used to produce ethanol set to reach 100m. tons, an increase of 44 percent from the previous year."

-- International Grains Council, Dec. 2007 press release

Note: Doyle may be in denial about biofuels -- which have been very, very good to his company's bottom line -- but at least he understands the depth of the crisis. Back in February, he said this:

"If you had any major upset where you didn't have a crop in a major growing agricultural region this year, I believe you'd see famine ... We keep going to the cupboard without replacing and so there is enormous pressure on agriculture to have a record crop every year. We need to have a record crop in 2008 just to stay even with this very low inventory situation."

Coskata To Me!

http://www.news.com/8301-11128_3-9928810-54.html

Cellulosic-ethanol company Coskata on Friday announced that it has broken ground on a plant in Pennsylvania that will be operating by early next year.

The company has said it can produce ethanol at $1 per gallon and that its process is clean, able to reduce greenhouse gas emissions by 84 percent, compared to gasoline. Corn ethanol, meanwhile, makes about the same greenhouse gases as gasoline production.



Texeme.Construct(function(x)=Participation(x))
Here's two more recent quotes

Nobel Prize winning economist, Joseph Stiglitz, from an interview with the BBC World Service (click here, and start at 41:40 minutes:

The single most important cause [of the global increase in grain prices] is probably the switch of land from food to the production of biofuels.

Iowa Senator Charles Grassley, speaking on a conference call with reporters:

If part of our problem is that the Chinese are going to eat meat and you've got to have corn and soybeans to feed the Chinese their meat, then why isn't it just as legitimate for the Chinese to go back and eat rice as it is for us to change our policy on corn to ethanol?


These are only my personal opinions.
Whoops!

Here's the link for the Stiglitz interview.

These are only my personal opinions.
This one takes the biscuit

Blairo Maggi, the governor of Mato Grosso state and Brazil's largest soy producer (aka, "King of Soy"):

With the worsening of the global food crisis, the time is coming when it will be inevitable to discuss whether we preserve the environment or produce more food. There is no way to produce more food without occupying more land and taking down more trees.

http://feww.wordpress.com/2008/04/24/famous-last-words/

Politicians starting to run scared

Texas Governor Rick Perry has asked the Environmental Protection Agency for an immediate waiver on the state's requirements under a federal ethanol mandate because of "skyrocketing food costs," according to a release on the state's Web site Friday. Perry asked the EPA to reduce the state's federal renewable fuel standard mandate by 50% for ethanol produced from grain. "We appreciate the good intentions behind the push for renewable fuels. In fact we're diversifying our state's energy portfolio at a rapid rate, but this misguided mandate is significantly affecting Texans' family food bill," said Perry in a statement. The governor also noted that the grain-to-ethanol requirement is hurting the state's cattle industry, particularly small family ranches.

Also ...if the King of Soy says that, it must be true because he hates environmentalists. Soy, used for biodiesel among many other things, does use rainforest land. Cane prefers the Cerrado savanna. They work as a team to destroy both ecosystems simultaneously.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

Need to 'do the math'

It is interesting that there doesn't appear to be a definitive study showing the effect of biofuels on food prices. It obviously has an effect, but the argument is about how much.

Perhaps it can't be done with any certainty, or nobody has yet bothered (can't be too far away).

An interesting paper on this is at http://www.ifpri.org/pubs/bp/bp001.asp

If you are interested I have summarised what I think the key policy issue is at http://canberrabureaucrat.blogspot.com/

more biofuel rants......

"ethanol's impact should not be overstated. The International Food Policy Research Institute, which is critical of ethanol, pins about 25 to 33 percent of the recent price rise on biofuels; the U.N. Food and Agriculture Organization guesses about 10 to 15 percent." washington post

i'm not looking for an easy scapegoat like some, but if i had to point a finger....the US has spent $177.6 billion of our tax dollars on ag subsidies from 1995-2006. Among subsidy recipients, ten percent collected 74 percent, amounting to $130.6 billion over 12 years. Add the corporate elite's and the pseudo-neo-conservative's notion of "free trade" (NAFTA, CAFTA, etc) into the equation and there is no mystery whatsover at the wall we're now building at our border, the food crisis, or price hikes....


super size me

in regards to deforestation....how about a comparison of acres converted to biofuels vs acres used for livestock and their feed to sustain the "super size me diet" and the epidemic of obesity in the US....and of course all the bad knees, twisted ankles, and diabetes that ensue...

so far as their dissent over FTAA goes...lets hear it for Brazil, Venezuela, Bolivia, Ecuador, Cuba, et al

8)

Good news for the world's poor

Even though biofuels play a marginal role in rising food prices, the price rises in themselves are good news for the world's poor.

According to the FAO's chief for Latin America and to Martine Dirven, head of the Agricultural Development Unit of the Economic Commission for Latin America and the Caribbean (ECLAC):

"Rising global food prices could represent an opportunity for the development of small-scale family farming if national governments provide effective support as part of long-term policies, say experts from various agencies."

 Can Rising Food Prices Help Small Family Farms?

Let's not forget that 75% of the world's poor depend on agriculture, so for them the current trend is great news - at least if they are helped by good policies.

Gone are the days of obscenely cheap food that leads to poverty; gone are the days of misery for the world's most vulnerable (i.e. the 3 billion ruralites dependent on agriculture) who were starved to death because of low agricultural prices for decades.

Let's all rejoice!

And if biofuels can help increase prices further, then let's rapidly expand the biofuels sector and let's invest in better access to markets and inputs for the world's farmers. It is our duty, to help the world's poor.

Like Lula says:

"Discarding biofuel would be 'crime against humanity'".


You're like the Every Ready Bunny, Jonas

"Even though biofuels play a marginal role in rising food prices" -- Define marginal. And if high prices are good, biofuels role in it is good. You should be promoting the fact that they have raised prices, not trying to downplay it.

Did you catch my last response on this thread?

From your latest link:

According to official figures from Argentina, over 66 percent of the country's farms are family outfits. There are a total of roughly 150,000 family farms that occupy 23 million hectares of land and account for 20 percent of total gross production and 53 percent of rural employment. However, more than half are facing problems in maintaining family ownership.

When asked by IPS whether the rise in food prices has benefited this sector, Diego Montón of the National Campesino and Indigenous People's Movement responded, "No, quite the opposite."

"We have seen no benefits for 30 years. All of the government's policies are aimed at promoting agribusiness, and family farming has only regressed even further. Many farmers have been directly evicted from their lands," reported Montón, who is himself a farmer from Lavalle in the western province of Mendoza



In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world
Too late

Bill Maher is sending out the anti-ethanol message, that it increases GHG and it is responsible for starving people around the world, causing food riots.

So now the rest of the comedy oriented progressive news cycle will pick it up.

Leaving ethanol advocates looking quite lame.  Shills for agribizz pork barrel government/industry corruption.

I think you have lost the battle, based on several studies featuring the doubling of GHG from substituting ethanol for gasoline, and more information indicating that grain prices tripling because of corn for ethanol demand has caused widespread hardship and starvation in areas where grian products, like corn meal are a necessary dietary staple.

Bill said the only reason candidates had to support ethanol was because the primaries started in Iowa.  Where agribizz corn/ethanol propaganda holds sway.

I am really starting to like the prospect of farm biogas as a fuel.  A fairly small, low pressure tank of methane, consumed in a very efficient solid oxide fuel cell/microturbine generator would take a plugin hybrid hypercar (ultralight/very strong carbon fiber body/frame) a few hundred miles after the initial 60 miles on the plgin battery pack.

This same system, in larger sizes could power trucks, tractors, construction equipment,  buses, and trains with actual carbon sequestration as the result.  How?

Well for every kwh worth of electric power generated (for cars, trucks, and trains in this case), the biogas digestion process removes 20 times the effective GHG from the atmosphere.  By preventing manure run off methane emissions are curtailed.  

Remember Branson's prize for an invention that would remove GHG?  Well this gets rid of 25 times the amount coming from your tailpipe.  In conjunction with organic agricuklture made possible with the biodigestor byproduct of organic fertilizer.

Biogas will even run in Branson's planes.  So I say once again.  Branson pay up!  Where's my 25 million?  Hehey.

http://amazngdrx.blogharbor.com/blog

FAO: oil prices by far biggest cause

Ron referred to the FAO, which says that biofuels are marginally responsible, and that oil is by far the biggest cuprit. Maybe we should paste the entire article in here, for those without access to it:

UN says oil rise hits food prices harder

By Javier Blas in London

Published: April 26 2008 03:00 | Last updated: April 26 2008 03:00

Biofuels are viewed by many as the main culprit in the food crisis, but agriculture experts say that other factors, ranging from higher demand in China to a slowdown in farming productivity growth, have greater influence on prices.

The United Nations' Food and Agriculture Organisation estimates biofuels have contributed to about 10 per cent of the current price rise. It argues that the surge of oil prices - through costlier fertilizer and diesel - is having a greater impact on food prices.

Jeff Tschirley, the chairman of the Inter-Departmental Working Group on Bioenergy at FAO in Rome, said: "Biofuel has been made a culprit, but we don't see it as the major [factor] responsible for high food prices."

Other organisations, such as the International Monetary Fund and International Food Policy Research Institute, the Washington-based think-tank, have estimated biofuel's contribution to current higher food prices at 20-30 per cent.

The FAO considers that biofuels "offer opportunities and risks" as they can contribute to rural income, but can also help to drive food prices higher.

Some policymakers are worried that the narrow focus on biofuels - sometimes together with so-called speculation in agriculture derivatives markets - could lead to the overlooking of long-term problems, such as low investment in agriculture, the impact of climate change or how to feed a growing global population.

Corn and soyabean are among the crops whose prices appear potentially most sensitive to demand for biofuels.

George W. Bush, the US president, recently said: "If you look what is happening in corn, you're beginning to see the food issue and the energy issue collide."

Joseph Glauber, chief economist at the US Department of Agriculture, said there was no question that biofuels "have a strong impact on corn".

The acknowledgement of the ethanol industry's impact on corn prices could lead to lower government support to the US biofuel industry, such as cutting the current tax credit of 51 cents a gallon, but it is unlikely to trigger a full-scale U-turn.

There is already discussion among US policymakers of lowering the tax credit to 45 cents.

However, Mr Glauber cautioned about pointing to the biofuel industry as the drivers of the price of wheat, rice or vegetables, which he said was boosted by other factors.

Analysts point out, for example, that the price of lentils - a staple in India - has jumped in a year to $800 (€511, £403) a tonne from $300 a tonne even though the commodity is not used for biofuels production and neither is it competing for land with biofuel crops.

Rising demand, bad harvests because of extreme weather and export restrictions had boosted the price, said analysts.

http://www.ft.com/cms/s/0/4493ad46-1329-11dd-8d91-0000779 ...

IEA warning: without biofuels, total catastrophy

And the IEA has this to say:

Energy watchdog backs drive to biofuels

By Carola Hoyos and Javier Blas in London

Published: April 26 2008 03:00 | Last updated: April 26 2008 03:00

Amid signs of a growing backlash against biofuels in the wake of the worst food price spike since the 1970s, the International Energy Agency said that the crop-based fuel was vital to meeting current and future demand.

Biofuels already make up about 50 per cent of the extra fuel coming to the market from sources outside the Opec's oil cartel this year. This explains why fears of a retreat from biofuels this week helped drive oil prices to record levels.

William Ramsey, deputy executive director at the IEA, said: "If we didn't have those barrels, I am not sure where we would be getting those half a million barrels [from]," adding that Opec has said it would not raise supply.

The warning comes as the backlash from rocketing food prices has increased pressure on the European Union and the US to review their support of fuel made from crops.

The views of the IEA carry significant weight in Europe and the US and policymakers have warned that the debate about biofuels should take into account its implications for energy markets and climate change. The issue has been put on the agenda for the next G8 summit in July.

However, the UN's Food and Agriculture Organisation says biofuels are not a major cause of the food crisis. The FAO estimates biofuels account for 10 per cent of the food price spike.

http://www.ft.com/cms/s/0/ad6dbcd4-132a-11dd-8d91-0000779 ...

Those who think batteries, solar panels and EV's are going to solve our problems, need a huge reality check.

Without biofuels, a development catastrophy of unthinkable dimensions awaits us.

And we don't want that.

greenfire8

"...in regards to deforestation....how about a comparison of acres converted to biofuels vs acres used for livestock..."

I don't see how adding another reason to destroy rainforests is a good thing (biofuels). I don't have a number for how fast forests are being cleared for grazing, but I suspect it isn't happening any faster than it is for biofuels:

And if those capitalizing on this hole in the human food chain are half as efficient as American farmers, you can expect twice as many square miles to be cleared--70 or so thousand.

And this is just the tip of the biofuel iceberg.

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

Stop the lies, biodiversivist

Stop falsifying the debate, biodiversivist. Biofuels do not contribute to deforestation. Biofuels are not the first cause pushing up food prices, the are the least important factor; biofuels are crucial to help humanity survive Peak Oil (see below), and are already having a major deflationary effect.

Stop the lies - you're committing crimes against humanity.

Stop the lies:

FAO: UN says oil rise hits food prices harder

Biofuels are viewed by many as the main culprit in the food crisis, but agriculture experts say that other factors, ranging from higher demand in China to a slowdown in farming productivity growth, have greater influence on prices.

The United Nations' Food and Agriculture Organisation estimates biofuels have contributed to about 10 per cent of the current price rise. It argues that the surge of oil prices - through costlier fertilizer and diesel - is having a greater impact on food prices.

http://www.ft.com/cms/s/0/4493ad46-1329-11dd-8d91-0000779 ...

Energy agency warns against retreat

By Carola Hoyos and Javier Blas in London

Published: April 26 2008 03:00 | Last updated: April 26 2008 03:00

The world can not easily afford to retreat from bio-fuels in spite of their possible role in driving up food prices, the west's energy watchdog has warned.

Speaking amid signs of a growing reaction against biofuels in the wake of the worst food price spike since the 1970s, the International Energy Agency said that crop-based fuels were vital to meeting the world's current and future energy demand.

Biofuels already make up about 50 per cent of the extra fuel coming to the market from sources from outside of the Opec oil cartel this year. This explains why fears of a retreat this week helped drive oil prices to record levels.

William Ramsey, deputy executive director of the IEA, said: "If we didn't have those barrels, I am not sure where we would be getting those half a million barrels." He added that Opec had made clear it would not raise its supply.

The warning comes as the popular backlash caused by skyrocketing prices of food has increased pressure on the European Union and the US to review their aggressive support of fuel made from crops such as corn and soyabeans.

Biofuels will this year consume almost a third of the US corn crop. Corn is trading near an all-time high of $6 a bushel.

Crude oil prices yesterday surged to $119.55 a barrel, boosted by renewed tension in the Gulf, further violence in Nigeria and the shutting down of a third of Britain's UK's North Sea oil production ahead of a strike.

The views of the IEA carry significant weight in Europe and the US and policymakers have warned that the biofuels debate should take into account its implications for energy markets and climate change.

http://www.ft.com/cms/s/0/d8c6ef32-1329-11dd-8d91-0000779 ...


So if the FAO is right...

If the FAO is right, about the fact that oil prices are having a greater impact on food prices than biofuels, then we have a good basis to say that, if oil prices go even higher, biofuels help make food less expensive.

Add the IEA's warning, that only biofuels can bring energy security, and we have a great basis for the rational promotion of biofuels.

Reason must rule.

Jonas, you're getting a little excited there

The IEA did not say "... only biofuels can bring energy security."

The FAO did not say "...biofuels are marginally responsible."

You are exaggerating what they actually say.

The IEA would be better served promoting higher gas mileage. The US would need half as much oil with cars that double the existing mileage average of about 24 mpg (like the Prius and TDI diesels can do).

From your quote above:

Biofuels will this year consume almost a third of the US corn crop. Corn is trading near an all-time high of $6 a bushel.

I did a simplified analysis here, using the fact that corn is increasing in price much faster than oil (in part because its price is tied to oil) and therefore has a bigger impact than oil. Your hypothesis that:

If the FAO is right, about the fact that oil prices are having a greater impact on food prices than biofuels, then we have a good basis to say that, if oil prices go even higher, biofuels help make food less expensive

could pan out only if biofuels do not increase in price also. But common sense suggests that they will and this link demonstrates why.

 

In the end, it all comes down to biodiversity. Poison Darts--Protecting the biodiversity of our world

Ethanol high

Don't sniff it Jonas, hehey.

http://amazngdrx.blogharbor.com/blog
spinning makes you dizzy....

someone's definitely sniffing something....

amazingdrx wrote: "based on several studies featuring the doubling of GHG from substituting ethanol for gasoline, and more information indicating that grain prices tripling because of corn for ethanol"

could we see those studies please? hehey

re: greenfire

Well the greenhouse gas one is easy

Take your pick,
Mark Delucchi 2005, Tad Patzek 2006, Paul Crutzen 2007, Alex Farrell 2008, Searchinger 2008, Fargione 2008, EU Commission's Joint Research Centre 2008, UK Royal Society - John Pickett 2008, Netherlands Environmental Assessment Agency 2008

Hehey

Thanks GreyFlcn.  Hmm, corn tripling?  I think it's around here somewhere?

"The price of the flat corn bread, the main source of calories for many poor Mexicans, recently rose by over 400%."

http://news.bbc.co.uk/2/hi/americas/6319093.stm

I guess I disremembered.  It was the flat corn bread, not the corn itself.  Still it is caused by corn/ethanol.

http://amazngdrx.blogharbor.com/blog

Price inflation

When the cost of a commodity that goes into a product, say grain into bread, goes up 10 cents per loaf; that 10 cents is not just passed on to the consumer directly raising the price of the loaf by 10 cents.

That would eat into the profit margin.  That cost must be multiplied by the ratio of the price of the loaf/cost of the grain in each loaf.

So it might very well raise the price of the loaf 40 cents.  

We ran into this on organic milk prices and the cost of milk to the dairy company.  To raise the payment to farmers the 7 cents to make their farms profitable (in the face of even more rapidly rising organic corn prices), organic milk prices to consumers would not go up 56 cents, it might have to go up a dollar or more.

It's a tough economic fact, inflation in base production costs like raw materials and energy are magnified when they are passed down the marketing chain to conmsumers.

This is why economic recovery above all requires stable energy and raw material prices, otherwise inflation runs out of control, weakening the currency and impoverishing the citizenry with less and less buying power in exchange for their labor.

Lower energy prices help lower commodity prices like corn.  And that keeps inflation in check, allowing easier credit.  Which results in families owning homes and moving into the middle class.  Becoming investors, in their own homes, instead of merely labor.  

They get on the investment side of the capitalist equation.  Saving and investing, using compound interest to achieve financial security.  They have a cushion in troubled times.  That is the basic right to pursue happiness, without financial security, happiness is mainly a temporary state.

See the "nest egg" theory, hehey.  From Albert Brooks' movie "Lost in America".

http://www.angelfire.com/80s/lostinamerica/synopsis2.html ...

"When the rain comes down, the 'nest egg' protects us, we stand under it and the rain drips off the edge."    

Argue with Brooks economists, he's way smarter than I am.

http://amazngdrx.blogharbor.com/blog

amazingdrx

That article said nothing about how much of the price rise is attributed to ethanol...

You want to know what's causing the problem in Mexico that's compelled the Dept of Homeland Security to ask for exclusion from enviro and social laws w/ the border wall construction? Try and "free-trade" (NAFTA, CAFTA, etc) fueled by billions in pork-barrel ag subsidies.

greyflcn

How about some data? The only way corn ethanol (notice i didnt say "biofuel") produces more GHG's is when it involves the destruction of native ecosystems.

Mexico has plenty of farmland going to waste now that our carrot-and-stick notion of "free-trade" has "sold their campesinos up the Rio Grande" and spurred unprecedented levels of immigration.

You can blame many countries and their "war vets" for the deforestation and destruction of wildlife for bush meat. If you will step back and look though, you might just see our hand in those wars. How about Chile with Kissinger & CIA's backing Pinochet for instance? That wasnt too long after the secret bombing in Cambodia, around the time of the last great quagmire, Vietnam.

To a huge extent, you give up the right to speak academically about a country's use of natural resources when you live in one that has profited so greatly from the other's strife and cheap capital.

Catch Colbert

He is doing a bit on ethanol tonight!  Just as I predicted, when I noted that Bill Maher had set the tone.

Uhh yeah, it's the market forces, right 8-ball?  Hehey.  That doesn't cut any mustard.  Of course it is, that is tautological.  What we are saying is that demand for corn for ethanol is what is forcing the market.

Duuuhhh.  

http://amazngdrx.blogharbor.com/blog

Not exactly

"The only way corn ethanol ... produces more GHG's is when it involves the destruction of native ecosystems."

Whenever, wherever plants turn CO2 into cellulose, they are acting as part of a balanced carbon cycle.  Interupt that cycle by burning the biomass, and that throws off the balance.

Use this hypothetical devestated cropland to grow corn that is burned as ethanol and it does not store carbon.  let it return to wild plants and it will then return to it's natural place in the cycle as a carbon sink.

No GHG-free lunch here.  You are behind..8-ball.

http://amazngdrx.blogharbor.com/blog

LOL

"Use this hypothetical devestated cropland to grow corn that is burned as ethanol and it does not store carbon.  let it return to wild plants and it will then return to it's natural place in the cycle as a carbon sink."
So you're saying that our version of pork-barrel "free-trade" effectively displacing millions of farmers is a good thing? Countries that used to be able to feed themselves, but now cant compete w/ our subsidized, tariff-protected crops, are just victims of "market forces?" I dont think Adam Smith would much approve of such pork-barrel spending in an analysis of "the invisible hand."

At least you're good for a laugh. So what about the food prices tripling in Mexico b/c of biofuel? Are you not able to back your point up? Your bobbing and weaving is far less than amazing, drx. hehey ROFL

To put it...

...In terms you will understand 8-ball.  Yur a doo-doo head.  Hehey.

http://amazngdrx.blogharbor.com/blog
thanks for proving my last point 8)



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